The Pound Sterling to Russian Rouble (GBP/RUB) exchange rate surged by around 1.7% on Tuesday afternoon.
British economic data produced positive results on Tuesday which caused the Pound to advance versus most of its currency rivals. Second-quarter Gross Domestic Product met with the median market forecast 0.7% growth on the quarter. In addition, second-quarter British GDP also met with the market consensus of 2.6% growth on the year. The Pound’s gains have been somewhat sluggish, however, as the headline figure masked some underlying economic issues. Whilst services growth prompted the tenth consecutive quarter of British growth, a significant slowdown in the manufacturing sector is concerning for many investors.
In addition to concerns regarding slow manufacturing output, the headline growth figure also masked issues in the labour market. Bank of England (BoE) Chief Economist Andrew Haldane warned that inequality in the labour market would make a benchmark interest rate hike dangerous for many struggling families. ‘There are still people without a job who would like a job; there are still people with jobs who would like to work more hours. And, even for those that have got jobs, their pay – in most cases – isn’t racing away,’ he told BBC2’s Newsnight last week.
The Pound Sterling to Russian Rouble (GBP/RUB) exchange rate is currently trending in the region of 94.2200.
Bearish crude prices are having a detrimental impact on demand for the Russian Rouble. The oil giant is struggling against disappointing exports, economic sanctions and lack of foreign investment. Despite all this, Russia’s yearly Gross Domestic Product slowed less-than-expected in June by -4.2%. Many analysts feel that Russia’s recovery will be elusive, however, given that oil prices are showing no sign of a significant recovery with global oversupply threatening long-term oil bearishness.
‘Probably we will lose around 3 percent of GDP this year. Next year we will be catching up, covering this output gap, but there is nothing on top of this which we can generate given the limited resources,’ stated Natalia Orlova, economist at Alfa Bank.
The Pound Sterling to Russian Rouble (GBP/RUB) exchange rate was trending within the range of 92.3290 to 94.7200 during Tuesday’s European session.